In Focus: Alliance Boots

Alliance Boots now boasts more than 500 stores outside the UK, as detailed in Retail Week Knowledge Bank’s profile update of a UK retail icon that just a few years ago was being tagged as one of Britain’s legacy retailers.

That, though, was before the Boots merger with Stefano Pessina’s Alliance Unichem and his vision of developing Boots into the world’s leading pharmacy-led, health and beauty multiple retailer. Since the merger the group’s international retail sales have risen 41% to almost £900m, while UK chemist sales have advanced only 9.5%.

When Boots commenced expanding internationally in the early 2000s - in Thailand, the Netherlands, Italy, Japan and Taiwan, and with various approaches - the City clearly didn’t get that the world was entering a period of sustained health and beauty market growth plus pharmacy deregulation, especially in Europe.

Over the years ahead, multiple businesses would increasingly be permitted to operate, whereas hitherto pharmacies were often restricted to sole practitioners or costly local authority undertakings. Certainly, Boots’ tactics and/or implementation record might have left something to be desired, but the City seemed fixated on instant gratification, in the form of short-term profit or nothing.

However, international retailing doesn’t usually work like that - it takes time, years, especially in an evolving regulatory climate over and above a globalising market place. Indeed, eventually Pessina, with the prize of Boots, deemed it necessary to take his enlarged operation private, in league with KKR, to achieve his vision.

It is increasingly apparent, just four or so years on, that Alliance Boots is particularly well placed to exploit the potential of its multiple chain expertise, often ahead of international or domestic competitors.